TRADE
POLICY REVIEWS: FIRST PRESS RELEASE, SECRETARIAT
AND GOVERNMENT SUMMARIESTogo:
January 1999

Economic
reforms, with the simplification of the foreign trade
regime, have contributed to an improved growth
performance in Togo of around 4 per cent in 1997 compared
to sharp declines in the early 1990s.

Economic
reforms, with the simplification of the foreign trade
regime, have contributed to an improved growth
performance in Togo of around 4 per cent in 1997 compared
to sharp declines in the early 1990s. However, the
economy is still recovering from the 1991-93 social and
political crisis which undermined the effects of the
previous unilateral liberalization efforts. A new WTO
Secretariat report on the trade policies of Togo states
that although Togo's economy is among the most open in
the West African subregion, its main constraint remains
investment, which has been at a low level since the
crisis.

The
WTO report, along with a policy statement by the Togolese
Government, will serve as a basis for the trade policy
review of Togo to take place at the WTO on 27 and 28
January.

The
report states that Togo's economy is mainly dependent on
agriculture. Togo imports food, petroleum products,
textiles and clothing, and exports phosphates, cotton,
coffee and cocoa. Re-exports represent over a quarter of
the total of goods exported by Togo. Togo's main trading
partners are France, Canada, Brazil and the West African
Economic and Monetary Union (WAEMU)1
countries, with France remaining Togo's main supplier.
The report notes that while Togo's trade balance has
recently improved, the current account balance is still
in deficit.

Togo
is a founding member of the West African Economic and
Monetary Union (WAEMU). This Organization's aim is to
create an economic union through the convergence of
macroeconomic and sectoral policies and the harmonization
of member countries' fiscal legislation. Monetary
integration with a common central bank and a common
currency  the African Financial Community franc
 has already been achieved. The structure of the
Common External Tariff has been defined and the
transition towards implementation began in July 1998 and
should end in January 2000. Togo is also a member of the
Economic Community of West African States (ECOWAS).

As
a signatory of the Fourth Lomé Convention, Togo receives
aid from the European Union and many Togolese exports to
the EU enjoy preferential treatment. Likewise, Togo's
goods have preferential access to the markets of other
developed countries under the Generalized System of
Preferences. The report notes, however, that the scope of
this non-reciprocal preferential treatment is limited,
especially owing to the small number of products exported
by Togo  namely raw materials that are generally
subject to zero or very low Most Favoured Nation (MFN)
duties in the importing countries.

Togo's
trade policy is essentially based on duties and taxes. As
part of its economic reforms, Togo simplified the
structure of its import duties. The entry duties
currently levied on imports consist of a fiscal import
duty, an infrastructure protection tax, a statistical tax
and community taxes. The simple average of these import
duties, exclusive of the infrastructure protection tax
and the Community taxes, is 19.5 per cent, with very low
level of dispersion. The import duty rates show a
generally negative escalation. In addition to import
duties and taxes, a value-added tax of up to 18% was
introduced in 1995. The report observes that Togo's WTO
bindings only cover a small number of products.

Agriculture
accounts for about 40 per cent of the GDP, three quarters
of the jobs and over half the export earnings. Cotton
accounts for about a quarter of these earnings. The
report notes that under its structural adjustment
programme, the Togolese government has liberalized the
agricultural sector and abolished price controls on most
products.

The
mining sector accounts for over a third of export
earnings, of which phosphate contributes about a quarter.
Togo is the fifth producer of calcium phosphate and
possesses large reserves with a high phosphate content.

The
manufacturing sector, mainly turned towards the domestic
market, represents less than 10 per cent of the GDP. It
is the most protected of all economic activities in Togo
with a large number of products subject to import duties
of over 20 per cent. The report remarks that the negative
escalation of these duties, from semi-finished to
finished products, could hold back the development of
final processing activities in Togo.

A
considerable portion of the GDP  44 per cent in
1996  comes from the tertiary sector, whose
development has been assisted by transit operations
through the port of Lomé, around which the Togolese
economy is organized. While Togo has made unilateral
liberalization efforts in the services sector, the report
notes that Togo's limited commitment under the WTO's
General Agreement on Trade in Services (GATS) do not
reflect these changes. The report also notes that
state-owned enterprises are still preponderant in this
sector.

Intellectual
property rights are protected in Togo by the Bangui
Industrial Property Agreement signed by some 15 African
countries. Work is in progress in the African
Intellectual Property Organization (AIPO)  set up
under the Bangui Agreement - to bring provisions of the
Agreement into line with the obligations of the Agreement
on Trade-Related Aspects of Intellectual Property Rights
(TRIPS).

The
report concludes that technical assistance would enable
Togo to identify the opportunities offered by the
multilateral trading system and gain a better
understanding of the scope of its undertakings so that
they may be better respected. In addition, as the
bindings carried out by Togo fall short of the
liberalization efforts undertaken by the country in trade
in services, such assistance could help widen the scope
of the bindings with a view to attracting investors by
giving them confidence in the irreversible nature of the
reforms.

Notes
to Editors

The
WTO's Secretariat report, together with a policy
statement prepared by Togo, will be discussed by the WTO
Trade Policy Review Body (TPRB) on 27 and 28 January
1999. The WTO's TPRB conducts a collective evaluation of
the full range of trade policies and practices of each
WTO member at regular intervals and monitors significant
trends and developments which may have an impact on the
global trading system. The Secretariat report covers the
development of all aspects of each of Togo's trade
policies, including domestic laws and regulations, the
institutional framework, trade policies by measure and by
sector. Since the WTO came into force, the new
"areas" of services and trade-related aspects
of intellectual property rights are also covered.

To
this press release are attached the summary observations
from the Secretariat report and a summary of the
government report. The full Secretariat and government
reports are available for journalists from WTO
Secretariat on request (call 41 22 739 5019). They are
also available for the press in the newsroom of the WTO
internet site (www.wto.org). The Secretariat report,
together with the government policy statement, a report
of the TPRB's discussion and the Chairman's summing up,
will be published in hardback in due course and will be
available from the WTO Secretariat, Centre William
Rappard, 154 rue de Lausanne, 1211 Geneva 21.

Situated
on the west coast of Africa, Togo is a least-developed
country (LDC) which became independent on 27 April 1960.
In the second half of the 1970s the Togolese authorities
undertook a programme of public investment to diversify
the economy that was strongly dependant on phosphates.
The difficulties encountered with the State-owned
enterprises created for that purpose, together with
Togo's natural difficulties as a LCD and the large public
deficits associated with this investment and a rapid
expansion of the wages and salary bill led to a
substantial increase in internal and external payment
arrears. From 1979 onwards the authorities introduced a
series of structural adjustment programmes (SAP) intended
to correct these imbalances.

The
implementation of the programmes was interrupted several
times, in particular by the social and political crisis
that Togo went through in 1991 at the beginning of its
transition to democracy. In January 1994 the African
Financial Community franc (CFA franc) was devalued: its
parity changed from CFAF 50 to 1 French franc to its
present level of CFAF 100 to 1 French franc. Following
the devaluation Togo introduced a new SAP for 1994-1997
intended to create an environment conducive to favourable
economic activity. To that end, the first stage of
privatization, which also involves the Togolese
Phosphates Office (OTP), has been almost completed.

In
general terms the reforms have led to a simplification of
the structure of import duties, and the rates of these
duties are now among the lowest in the West African
Economic and Monetary Union (WAEMU), of which Togo is a
member. The improvement in the performance of the tax
authorities and customs administration and the tax
components of the reforms made it possible to increase
the internal revenue from 10.9 per cent of the Gross
Domestic Product (GDP) in 1993 to more than 18 per cent
in 1996 and to about 16 per cent in 1997. An upturn in
real GDP was recorded from 1994 onwards, at rates above 8
per cent, except in 1997 when growth was estimated at 3.9
per cent, although these rates are partly a reflection of
the process of catching up following the major falls in
the years 1992 and 1993. The external balances also
improved. However, the Togolese economy, having already
been weakened by the crisis and the strong demand for
local goods partly induced by the substitution effect of
devaluation, sustained inflation, whose rates had not, by
1997, returned to their previous level.

The
Togolese economy is mainly dependent on agriculture
(cotton, cocoa, coffee and food crops), which accounts
for about 40 per cent of the GDP, three quarters of
the jobs and over half the export earnings. Cotton
accounts for about a quarter of these earnings. Togo is
the fifth world producer of calcium phosphate and
possesses large reserves with a high phosphate content.
The subsoil also contains marble (now being exploited)
and iron ore (not exploited). The mining sector accounts
for over a third of export earnings, of which phosphate
contributes about a quarter. The manufacturing sector,
mainly turned towards the domestic market (principally on
account of the size of the production units) represents
less than 10 per cent of the GDP. The food-processing
industry is the most important branch of the sector. A
considerable portion of the GDP (44 per cent in 1996)
comes from the tertiary sector, whose development has
been assisted by transit operations through the port of
Lomé, from which an important road network leads to the
land-locked countries to the north of Togo. In addition,
the main supplier of jobs in Togo (396,000 jobs in 1997)
is the informal sector (excluding agriculture), which
considerably developed during the crisis of 1991-1993. It
represents about 33 per cent of the value added of the
manufacturing sector, 52 per cent of the services sector
and 37 per cent of the trade sector.

Long
in deficit, the Togo balance of trade was in surplus in
1994, 1995 and 1997 (estimate). On the other hand, the
balance of services is in chronic deficit, which sustains
that of the balance on current account. The latter has
increased since devaluation as a result of the increase
in CFA franc terms of the interest on foreign debt and
expenditure on insurance and freight. Togo's foreign
trade mainly involves the import of food and petroleum
products and textiles and clothing and the export of
phosphates, cotton, coffee and cocoa. Re-exports
represent over a quarter of the total of goods exported
by Togo.

Togo's
main trading partners are France, Canada, Brazil and the
WAEMU countries. South Africa, Indonesia and Malaysia
have become important outlets for Togolese products in
recent years. Togo exports phosphates to Canada (the main
destination for Togolese products) and South Africa.
Cotton is mainly sent to Chinese Taipei and Brazil and
coffee to the European Union. Despite a decrease in its
share of Togolese imports, France is still Togo's main
supplier. In all about one fifth of Togolese imports come
from countries in the West African subregion. However,
apart from the increase of imports from Côte d'Ivoire
and Senegal, the devaluation of the CFA franc does not
seem to have favoured the substitution of goods from
WAEMU countries for those of other suppliers. The same is
true of Togolese products going to other WAEMU countries.

INSTITUTIONAL
FRAMEWORK

In
accordance with the provisions of the 1992 Constitution,
Togo is a democratic State. The President of the Republic
is the Head of State; he is elected by universal suffrage
for a five-year term renewable only once. As the holder
of executive power, he establishes the broad outlines of
State policy and appoints the Prime Minister and the
other members of the Government. The National Assembly
exercises legislative power. An Economic and Social
Council gives its advice on all matters brought to its
attention by the President of the Republic, the
Government, the National Assembly or any other public
institution; it must also be consulted on every draft
plan, programme or instrument having an economic and
social character.

Togo
has no commercial code and French law is applied in many
areas. Nevertheless, national laws and regulations do
exist. Coming into force in 1989, the Investment Code
(Code of 1965 revised on several occasions) is intended
to encourage export-oriented investment, increase the
employment of Togolese workers, promote the establishment
of SMEs, encourage the decentralization of economic
activities and make optimum use of the country's natural
resources. It guarantees the same rights and obligations
to national and foreign enterprises. Similarly, it
guarantees the freedom of capital transfer and of income
and salaries for foreign natural or legal persons. Plans
to revise it are subordinated to the expected
introduction of a community investment code in the WAEMU
framework. In addition, in accordance with the provisions
of the Mining Code of 1996, any natural or legal person,
whether Togolese or foreign, having the necessary
technical and financial capacity, is entitled to exploit
mineral substances. However, the right to engage in such
operations can be acquired only by virtue of mining
titles issued by the Ministry of Mines. The Code gives
advantages, especially fiscal advantages, to mining
companies. Finally, important advantages, including
fiscal and customs advantages, are granted under the free
zone regime, which Togo has had since 1989. This regime
is one of the most important in West Africa.

Togo
became a Member of the WTO on 31 May 1995, after having
de facto applied the GATT from April 1960. It grants at
least most-favoured-nation (MFN) treatment to all its
trading partners. Togo, following the example of other
WTO Members, has adopted in their entirety the results of
the Uruguay Round and entered into commitments in the
form of binding of duties and measures relating to the
modes of supply of certain services. It has benefited
from the treatment granted to the least-developed
countries, notably in the form of exemptions or delayed
implementation of certain provisions, and it should
benefit in particular from the strengthening of rules and
disciplines in the multilateral trading system in sectors
such as agriculture, which are particularly important for
the country. Togo hopes that the integrated programme
launched by the WTO and other organizations at the
High-Level Meeting held in Geneva in October 1997 will go
beyond the technical assistance objectives therein:
Togo's main concern is to increase and diversify
production so as to be able to take better advantage of
the opportunities available as well as those which should
result from the continued liberalization at the
multilateral level.

Togo
is a founder member of the West African Economic and
Monetary Union (WAEMU). This organization's aim is to
create an economic union through the convergence of
macroeconomic and sectoral policies and the harmonization
of member countries' fiscal legislation; monetary
integration, with a common central bank, the Central Bank
of the West African States (BCEAO), and a common currency
(the African Financial Community franc), has already been
achieved. The structure of the Common External Tariff
(CET) with four rates (1 per cent, 6 per cent, 11 per
cent and 21 per cent plus the Community levies
totalling 1 per cent) has been defined, and the
transition towards implementation began in July 1998 and
should end in January 2000, by which date the customs
union should have been completed. Togo is also a member
of the Economic Community of West African States (ECOWAS)
whose Treaty also envisages the creation of a customs
union, although the timetable for establishing the union
has not been respected.

As
a signatory to the Fourth Lomé Convention, Togo receives
aid from the European Union and benefits from the
Stabilization System for Export Earnings (STABEX). Under
the Convention, many Togolese exports to the EU enjoy
non-reciprocal preferential treatment in the form of
exemption from import duties. Likewise, Togo's goods
enjoy non-reciprocal preferential access to the markets
of developed countries other than the members States of
the European Union under the Generalized System of
Preferences. The scope of this non-reciprocal
preferential treatment is limited, especially owing to
the small number of products exported by Togo, namely raw
materials that are generally subject to zero or very low
MFN import duties in the importing countries. As at July
1998, Togo had not been involved in any dispute
settlement proceedings under the GATT, the WTO or any
other trade agreement signed by it.

TRADE
POLICY FEATURES

Trade
policy instruments and their impact

Togo's
trade policy is essentially based on duties and taxes.
The reforms introduced by Togo as part of its structural
adjustment programmes have enabled it to liberalize
foreign trade operations, abolish certain monopolies and
simplify the structure of import duties. In 1990 Togo
adopted the Harmonized System Nomenclature and has
applied the 1996 version since 1 January 1998.
The entry duties currently levied on imports consist of a
fiscal import duty (DFE) of 5, 10 or 20 per cent; a
statistical tax (TS) at the single rate of 3 per cent; an
infrastructure protection tax (TPI) of CFAF 2,000 per
tonne; and community taxes levied on behalf of WAEMU
(PSC) and ECOWAS (PC) at 0.5 per cent each. The simple
arithmetic average of these import duties (excluding PCS,
PC and TPI) is 19.5 per cent, with a minimum of 3
per cent and a maximum of 23 per cent. With their very
low level of dispersion, the import duty rates show a
generally negative escalation from semi-processed goods
to finished products. The most heavily taxed goods are
fishery products, tobacco, clothing, footwear, leather
goods and articles made of plastic. On the other hand,
mining products, printed matter and non-electrical
machines are the least heavily taxed goods.

In
addition to import duties and taxes, value-added tax
(VAT) at three rates (0, 7 per cent and 18 per cent) was
introduced in 1995. Certain products, principally
medicines and medical equipment and agricultural and
fisheries, inputs are exempt. Specific duties are also
levied on imports of beverages, tobacco, flour, oils and
fats, cement and industrial gas; these taxes sometimes
vary according to the origin of the products (Togo,
ECOWAS or other countries). A tax on the consumption of
petroleum products (TCPP), in an amount of CFAF 50 per
litre, is payable on all petroleum products except
paraffin for domestic use (which is exempted). A down
payment (of 1 per cent for registered importers and 5 per
cent for non-registered importers) on business profits
and on the corporate tax is also levied on importation on
behalf of the Directorate General of Taxation.

Under
the Uruguay Round, Togo has bound the import duties and
taxes on agricultural products (like other WTO Member
countries) and those applicable to products coming under
Chapters 43 (furskins and artificial fur), 75 (nickel and
articles thereof) and 78 (lead and articles thereof) of
the Harmonized System at the ceiling rate of 80 per
cent. Thus, the bindings cover a relatively small number
of products and leave Togo a great deal of room for
manoeuvre in view of the large gap between the bound
rates and rates actually applied. The other duties and
taxes on these products have also been bound: the
statistical tax at the rate of 3 per cent, the toll on
sea cargo in an amount of CFAF 200 per tonne and the
customs stamp on the taxes collected at the rate of 4 per
cent where the product enters with exemption from the
DFE. With the introduction of the TEC, the WAEMU
Commission intends to renegotiate the tariff concessions
of all Member countries.

Togo
possesses 45 national standards, all of which have been
approved, in particular on water, building materials and
tinned foods. It has dismantled most of the quantitative
restrictions on imports and those currently in force are
retained for reasons of health, security or morals.
However, imports of potatoes can be prohibited from
August to February, when local production covers local
demand. The importation of gold requires prior
authorization by the Minister of Finance and Economic
Affairs. Furthermore, within the framework of the imports
inspection programme, execution of which was entrusted to
the COTECNA company in 1995, all importers of goods of an
f.o.b. value exceeding CFAF 1.5 million in the case of
those arriving by air or sea and CFAF 1 million
in the case of those arriving by land must complete an
Intention to Import form and lodge it with the inspection
company. The COTECNA procedures connected with the
Intention to Import take about two weeks. Togo has no
national legislation regarding anti-dumping,
countervailing or safeguard measures.

Except
for phosphates, which are still subject to licensing,
there are no longer any quantitative restrictions on
exports. However, the export of local food products can
be temporarily suspended in case of shortage. The only
export duties and taxes still in force are levied on
re-exports and transit operations. Thus, a special
re-export tax (TSR) is levied on rice and sugar at a rate
of 1 per cent and on other products at a rate of
4 per cent; vehicles are exempt. In practice, no
taxes are levied on transit operations to the land-locked
countries of the Sahel, although the TS, the TPI and the
customs stamp (TD) are levied on transits to other
countries.

In
order to stimulate exports, the Togolese authorities have
provided for advantages through the Investment Code and
established the free zone regime. Thus, enterprises
approved under the Investment Code which export part of
their production are exempted on a portion of their
profits (for calculating the corporate tax (IS)) and on a
portion of their turnover (for the calculation of the
minimum formula tax). This is equal to a proportion of
the turnover exported in the course of a financial year
as compared with the global turnover excluding VAT. In
addition, enterprises processing raw materials and
intermediate products of Togolese origin, representing in
value at least 60 per cent of the total purchases of
these materials and products entering their factories
enjoy total exemption from the minimum formula tax for
seven years. The enterprises with free zone status (they
must export at least 80 per cent of their production)
enjoy, inter alia, partial exemptions from customs
duties, and tax exemptions, including corporation tax.
Additional advantages are also offered to them, in
particular, the possibility of having a foreign currency
account, freedom to transfer capital and preferential
tariffs for port services and the consumption of water,
electricity and telecommunications services (e.g. 6 per
cent discount for the telephone).

Since
1967 the prices of goods and services have been fixed
freely by the economic operators in Togo, except for the
prices of water, electricity, petroleum products and gas,
which are regulated. A bill to organize competition in
Togo has been placed before the National Assembly with a
view to updating the provisions of the price regulations
and the rules applicable in matters of competition. This
provision, which is now being examined, envisages the
establishment of a National Competition and Consumption
Commission. In addition, new impetus was given at the
beginning of the 1990s to the programme of State
disengagement from production and marketing operations,
which had been launched in 1983.

Intellectual
property rights are protected in Togo by the Bangui
Industrial Property Agreement signed by some 15 African
countries, under which the African Intellectual Property
Organization (AIPO) was set up, as well as by a law of
June 1991 and its application texts to protect copyright,
folklore and related rights. Work is in progress in AIPO
to bring the provisions of the Bangui Agreement into line
with the obligations of the WTO Member countries
contained in the Agreement on Trade-Related Aspects of
Intellectual Property Rights. In Togo most of the
disputes concerning intellectual property (the most
common infringements mainly relate to the counterfeiting
of a trademark) are settled privately: the absence of
coordination and the limited resources of the
administrative departments acting in this area (including
those responsible for enforcement) are probably the main
reasons.

Policies
by sector

The
Togolese economy is organized around its main port, the
Lomé Autonomous Port (PAL). Most of Togo's foreign trade
passes through this port, which serves as a transit point
for goods intended for the land-locked countries of the
Sahel such as Burkina Faso, Mali and Niger. Exploitation
of this position has encouraged the installation of
communication networks linking the port to the
land-locked countries and, at the same time, the opening
up of Togo to the outside world. The structure of the
import duties, by encouraging the transit and importation
of certain goods for which there is a strong demand in
the subregion, has also helped to ensure the
preponderance of the services sector within the Togolese
economy. The social and political crisis that Togo
experienced at the beginning of the 1990s impaired the
dynamism of this sector, which the Government is
currently trying to restore. However, the State continues
to have a strong presence in the sector through its
wholly owned enterprises.

The
agricultural sector has been substantially liberalized
and price controls on most products have been abolished.
This liberalization has encouraged the arrival of private
exporters in areas such as coffee and cocoa. However,
cotton, Togo's main cash crop, continues to be dominated
by a State- owned company, the Togolese Cotton Company,
which intervenes in production (outreach action) and
marketing. One of the chief problems facing agriculture
in Togo is that of storing and preserving produce, which
is the reason for major seasonal price fluctuations (very
low prices at harvest time and excessively high prices
during transition periods and drought years). This
problem is aggravated by the lack of infrastructure which
makes access to certain regions difficult (particularly
during the rainy seasons), including the main production
areas. Agriculture also suffers from the difficulty of
access of peasant farmers to credit.

Limited
to the exploitation of phosphate and limestone, the
mining activities, which so far have been dominated by a
State-owned company, the Togolese Phosphates Office
(OTP), could be developed with privatization, including
that of part of this enterprise's capital, which is
envisaged as part of the measures formulated by the
Government to attract investors into the sector. The
Mining Code was revised in 1996 to that end. Furthermore,
in terms of import duties, the mining sector is the least
protected in Togo.

Since
1989, the free zone regime has reflected the direction
given to Togo's industrial policy, namely the promotion
of export-oriented enterprises (particularly industrial
ones). Despite the potential of the Togolese economy for
development of this sector, factors such as the social
and political crisis, the structure of the import duties,
which the advantages offered by the various codes should
correct, the lack of integration of the various sectors
and the increase in the cost of inputs as a result of the
devaluation of the CFA franc in 1994 have held back
industrial development in Togo. The manufacturing sector
is the most protected (in terms of import duties) of all
economic activities in Togo and, in fact, a large number
of products of the sector are subject to import duties of
over 20 per cent. However, the negative escalation of
these duties, from semi-finished products to finished
products, could hold back, without prejudice to
exemptions, the development of final processing
activities in Togo; this could be an explanation for the
predominance of the production of semi-finished goods in
the sector.

The
preponderance of State-owned enterprises in the services
sector is a reflection of the slowness by the Togolese
authorities in liberalizing this sector. Moreover, the
bindings carried out by Togo remain limited to the
measures relating to the modes of supplying construction
and related engineering services, tourism and
travel-related services and recreational, cultural and
sporting services; this does not reflect the
liberalization effort unilaterally carried out by Togo in
this sector.

TRADE
POLICIES AND TRADING PARTNERS

The
major liberalization efforts unilaterally carried out by
Togo were undermined by the social and political crisis
that shook the country from 1991 to 1993. The Togolese
economy is recovering slowly from this experience, and
Togo possesses the necessary potentialities to take up
such a challenge. Its economy, which is among the most
open in the West African subregion, has generally
operated according to market rules, even at a time
several State-owned enterprises were operating there. The
main constraint remains investment, especially foreign
investment, which has been at a low level since the
crisis.

The
establishment of the WAEMU customs union could increase
the nominal protective tariff and the rates of effective
protection in Togo. Since the Togolese economy is already
quite liberal in comparison with those of other WAEMU
countries, the advent of the union should not cause too
much anxiety to local producers: Togolese products did
not receive strong competition from products from other
WAEMU members following the devaluation of the CFA franc.
Given its current advantages, in particular, its
infrastructure, Togo could become one of the poles of
attraction for the investment that the establishment of
the customs union should encourage, with access to the
markets of the union being at stake. However, the
advantages provided by Togo's free zone regime could be
compromised by the entry into force of the Community
Investment Code, since Togo is one of the few countries
of the union to have managed to establish one; that
regime is also greatly preferred by investors to that of
the Investment Code.

Togo
would like technical assistance to be provided so as to
help the WTO Agreements become better known. In
accordance with the wishes of the Togolese authorities,
this assistance should, inter alia, enable the country to
identify the opportunities offered by the multilateral
trading system and gain a better understanding of the
scope of its undertakings so that they may be better
respected. In addition, as the bindings carried out by
Togo fall short of the liberalization efforts undertaken
by the country in trade in services, such assistance
could help to improve its performance in this area and,
by giving investors confidence in the irreversible nature
of the reforms, attract finance, especially from abroad.

1.
Towards the end of the 1970s, Togo experienced a
deterioration in its internal and external balances
caused, inter alia, by a prolonged decline in the
terms of trade attributable to the fall in world prices
of its principal exports. In 1983, the Government
therefore launched a process of adjustment aimed at
re-establishing economic viability through in-depth
structural reforms, and at ensuring renewed growth. The
successive programmes implemented by the Government were
backed by the International Monetary Fund (IMF), the
World Bank and other bilateral and multilateral funding
sources.

2.
These adjustment efforts, which produced relatively
satisfactory results from the point of view of
macroeconomic balances, were unfortunately seriously
disrupted and undermined as from the last quarter of 1990
by the socio-political disturbances which accompanied the
process of democratization. The socio-political crisis
culminated in 1993 with a general strike which lasted
more than nine months in some branches of activity.

3.
The crisis was felt particularly strongly in the
secondary and tertiary sectors whose production units are
for the most part located in and around Lomé. Only the
primary sector experienced growth as a result of the
influx of labour as the urban population moved to the
country during the socio-political unrest.

4.
Government revenue fell sharply, while expenditure did so
to a lesser extent. Thus, the government budget deficit
worsened seriously with the accumulation of internal and
external arrears.

5.
In this very poor financial and economic context, the
exchange rate of the CFA franc against the French
franc was adjusted on 12 January 1994, initially
aggravating inflation in the economy in general.

6.
In order to put a halt to the persistent deterioration in
the economic and financial situation and take full
advantage of the opportunities offered by the devaluation
of the CFA franc, the Government decided to introduce
three-year and medium-term adjustment programmes aimed at
re-establishing economic balances and fostering equitable
growth.

7.
In that connection, the Prime Minister defined the
overall economic and trade policy objectives of the
country in his key-note address of September 1996 (see
Section II.(1)).

8.
Considerable efforts were then deployed to achieve the
main macroeconomic objectives. The Togolese economy began
to grow again with a relatively low inflation rate and an
improved balance in the external current account.
However, the rate of investment remained low in relation
to the country's needs.

9.
For the last few years, the country has had a relatively
stable democratic political framework featuring a
multi-party system, a free private press and a number of
democratic institutions (Constitutional Court, high
authority for audiovisual media and communication,
Supreme Council of Justice, Court of Audit, Parliamentary
Court of Justice, Supreme Court).

10.
To summarize, in this socioeconomic context, Togo
achieved positive, variable growth rates (16.4 per cent
in 1994; 6.8 per cent in 1995; 9.1 per cent in 1996 and
4.7 per cent in 1997), while remaining one of Africa's
least-developed countries with a per capita GNP of US$320
in 1994.

11.
In the framework of its overall economic and social
development policy, Togo has for many years now been
implementing a liberal trade policy.

12.
Although confirmed as an open-door policy in the 1970s,
this liberal option has been punctuated with
interventionist measures, including:

(i)
A state-trading monopoly;

(ii)
tariff and tax measures;

(iii)
non-tariff measures such as:

-
regulation of imports and exports resulting in quotas
and prohibitions;

-
protection of local industries;

-
import and export licensing;

-
registration of economic operators;

-
price approval and controls, etc.

1.
In response to the constraints imposed by the domestic
and international economic and trade environment, Togo
began in the 1980s, either autonomously or at the
recommendation of the IMF, the World Bank and other
international organizations, to strengthen its policy of
liberalization by eliminating various interventionist
measures and freeing up economic and trade activities in
general. It also stepped up efforts to attract foreign
investment.

13.
In response to the economic and social development
aspirations of the country's populations, the Prime
Minister, in his key-note address of September 1996,
defined the country's overall economic policy objectives
as follows:

(iv)
Restore macroeconomic and financial balance;

(v)
revive the development programmes with a view to
achieving sustained, durable and balanced economic and
trade growth. The following programmes are involved:

-
fiscal consolidation;

-
privatization of State enterprises;

-
adjustment and reflation of the economy;

-
strengthening of development management capacities,
including good government, poverty alleviation,
adjustment of the financial sector, support for the
private sector, and the action plan for the
development and promotion of trade;

-
improve the country's external competitiveness;

-
take advantage of subregional economic integration
within WAEMU and ECOWAS;

-
take advantage likewise of the operational activities
of the United Nations system with respect to
economic, trade and social development.

14.
The planned quantitative results of these programmes are:

(i)
To achieve an average annual growth rate of real GDP of 6
per cent;

(ii)
to maintain an inflation rate, measured in terms of the
consumer price index, of 3 per cent on average;

(iii)
reduce the deficit in the balance on current account,
grants included;

(iv)
settle domestic arrears;

(v)
reduce external arrears as far as possible;

(vi)
substantially reduce the level of non-IMF domestic
borrowing by the Government and public sector
enterprises.

15.
The resources needed to implement these programmes and
achieve the intended results are to come from higher
domestic savings and an increase in the level of external
financing.

16.
With respect to trade in general, and in spite of the
economic difficulties and socio-political disruptions,
Togo is keen to strengthen and improve its position as a
trading centre and transit country in West Africa.

17.
Thanks to its infrastructure, in particular the
autonomous deep water port, the international airport of
Lomé and Niamtougou, its export-processing free zone,
its road network, etc., Togo is a trade crossroads for
the West African subregion, and in a spirit of solidarity
and complementarity, it serves as a relay centre for
imports and exports of its neighbours, in particular the
land-locked countries.

18.
Beyond this concern with national, regional and
continental matters, Togo has been more than simply a
by-stander in the new international economic and trade
context.

19.
In addition to the measures aimed at the general
liberalization of economic and trade activities, Togo
took the necessary steps to respond to the requirements
of this new international context and became an original
Member of the WTO on 31 May 1995.

20.
Over the past few years and in the future, Togo's trade
policies have been and will continue to be concerned
with:

(i)
Introducing an action plan for the development and
promotion of trade;

(ii)
improving the institutional and regulatory framework with
a view to creating an environment favourable to the
private sector, to investment and to the promotion of
exports and foreign trade;

(iii)
drawing up and implementing follow-up and support
measures to ensure that liberalization effectively
benefits the private sector, consumers and the national
economy and becomes a factor in the country's economic
and social development;

-
identifying the comparative advantages and
disadvantages of the liberalization measures and
ensuring that the economic operators are aware of the
action that has to be taken to reduce or avoid the
disadvantages (inflation, abusive or inappropriate
influence of devaluation and VAT on prices) while
maximizing the advantages (diversification of sources
of supply, fair competition, lower inflation);

-
strengthening and improving output and productivity
of goods that can actually be exported;

-
identifying and implementing measures to encourage
and support diversification and intensification of
production for export of non-traditional goods and
goods in the agricultural, fishing, industrial,
crafts and livestock sectors;

-
strengthening and improving human and institutional
capacities as regards management and the promotion of
trade and related activities, and ensuring
coordination among the structures involved in trade
promotion;

-
stepping up participation in international and
regional fairs to promote exportable products;

-
improving competitiveness from the point of view of
quantity, quality and standards;

-
developing and implementing measures to stimulate
investment and the financing of production for export
through appropriate structures;

-
rationalizing imports (better sources of cheaper
supply with a view to obtaining the best value for
money);

-
pursuing the process of State withdrawal from
non-strategic sectors;

-
intensifying and improving transit trade;

-
enhancing the country's involvement in international
organizations dealing with international trade;

-
following up and taking full advantage of the
bilateral and multilateral agreements and conventions
to which our country is party, as well as the
different preference systems and liberalization
arrangements for which they provide;

-
ensuring that the private sector, civil society,
universities, NGOs, trade unions and civil
associations are all actively associated with the
development and implementation of the above measures.

23.
The Government's objectives in this sector are to
restructure the ministerial departments concerned in
order to make them more dynamic and efficient in carrying
out their tasks, and also to transform the Togolese
public administration into an efficient development tool.

24.
Thus, the strategy to modernize public administration
aims, inter alia, at redefining the essential
roles of the State and of each ministerial department
concerned, at implementing the programme for
administrative decentralization, a coherent employment
policy including an appropriate manpower plan, and
incentives to stimulate a spirit of emulation with a view
to boosting productivity. It is in this context that,
with the recent restructuring of the Government, a
ministry was created to take charge of modernizing the
administration.

25.
Togo's budgetary policy essentially aims at respecting
the convergence criteria defined within the WAEMU, and
its principal medium-term objective is to boost public
saving in order to maintain a high rate of public
investment in general and investment financed by domestic
resources in particular. Appropriate measures will be
taken to that end, directed towards the rationalization
of expenditure in order to achieve an overall deficit
level that can be financed through ordinary resources,
making it possible to settle internal and external
arrears and reduce the overall deficit excluding grants.

26.
Togo's overall monetary policy will continue to be
coordinated at the regional level with its WAEMU partners
so that foreign exchange reserves can guarantee the
stability of the CFA franc. Interest rate policy will be
designed to maintain intervention rates at levels which
make it possible to attract and retain capital in member
countries. The Togolese authorities will continue to
cooperate with their WAEMU partners in strengthening the
mechanisms used by the regional central bank to absorb
bank liquidities, pursue the progress achieved in
introducing a regional financial market and enhance the
efficiency of the process of mobilizing domestic
financial resources.

27.
The option of State withdrawal from the production of
goods and services and the dismantling of monopolies
should greatly facilitate the liberalization of trade and
the development of viable financial, banking and
insurance systems for the benefit of domestic and foreign
trade and service operators both upstream and downstream,
including transport, post and telecommunications, water
and electricity, and tourism.

(a)
Transport

28.
The Government's objectives in this sector include:

-
Reinforcement, rehabilitation and regular maintenance
of urban and rural road infrastructures, to which end
a road maintenance fund has been created;

-
further liberalization of maritime transport; in this
connection, freight distribution has been eliminated
in order to allow economic operators to choose their
means of transport freely, and port fees have been
considerably simplified;

-
strengthening, improving and facilitating transit
trade through the Togo corridor with a view to
reinforcing Togo's external competitiveness. To that
end, the Government plans to create a dry port at
Blitta to make it easier to transport goods towards
the interior of the country and hinterland countries;

-
restructuring and improvement of rail transport;

-
improvement of the efficiency of air transport
services;

-
reducing the social costs of transport and ensuring
proper safety in the transport sector.

(b)
Post and telecommunications

29.
To ensure efficient and competitive telecommunications
services, in 1995 the Government launched a process of
liberalization which should culminate in 1999 with the
opening up of the capital of Togo Telecom to the private
sector. The long-term objective is the liberalization of
all segments of the market. The process, which has
already begun with the granting of a mobile telephone
licence, includes, inter alia, the setting up of a
regulatory agency for the sector together with a
frequency management unit.

30.
As regards the postal system, the restructuring process
is to be pursued and will ultimately result in
privately-run postal services.

(c)
Electricity and water

31.
In the field of electricity and water, the Government's
action will focus on pursuing the implementation of
measures designed to recover service costs and to apply
the corresponding charges with a view to making
production units as profitable as possible, thereby
increasing their capacity for financing their own
investments.

32.
It was to that end that the implementation of the plan
for the settlement of internal arrears focused
particularly, in 1997, on the debt of the Electric Power
Company of Togo (Compagnie énergie électrique du Togo -
CEET) and the National Water Company of Togo (Régie
nationale des eaux du Togo - RNET) with the State and
State companies. In order to improve management
efficiency in the sector, the Government will also have
recourse to the private sector, either through outright
privatization, or by arrangements such as privatization
of commercial management (in the case of RNET) or
concessions (in the case of CEET).

33.
The Government will also seek to promote private sector
investment in energy and water management with a view to
improving the supply to the population. In the long term,
it will also seek an overall solution to its energy
problems in the framework of subregional cooperation.

34.
The Government's efforts will focus in the long term on
increasing electricity production in order to reduce the
country's dependence on imports. The responsibility for
these efforts is entrusted to the Beninese Electrical
Community (Communauté électrique du Bénin - CEB), and
they essentially concern the rehabilitation and
maintenance of thermal power plants, the construction of
a new dam on the Mono River, and the evaluation and
exploitation of a country's energy resources.

(d)
Tourism

35.
Sectoral objectives in this area consist, inter alia,
in:

-
Drawing up a national master plan and regional master
plans for the development and promotion of tourism;

-
updating the regulatory and tax framework to provide
greater incentives and make it more attractive;

-
developing existing tourist sites (renovation,
equipment, maintenance, safety, hygiene) as well as
potential sites: the coastline, lake shores and other
sites in Lomé and in the interior;

-
developing human resources in the tourism business
and training tourist guides;

-
enhancing awareness among the different categories of
law enforcement services involved in receiving
tourists, ensuring their safety and protecting
tourist sites;

-
promotion of national and subregional tourism; in
this connection, the first "national tourism
caravan" was recently organized on the occasion
of World Tourism Day. At the subregional level, Togo
has organized, with its partners, the "Entente
Tourist Visa" in the framework of the Entente
Council.

36.
The Government's objectives in the field of agriculture
consist, inter alia, in:

-
Pursuing the liberalization of the various sectors.
To that end, following the complete liberalization of
the coffee-cocoa sector from primary marketing
through to export, in the cotton sector too exports
have begun to be liberalized, with the setting up of
the Société industrielle de coton (SICOT), which
gins the cotton and exports the fibre on its own
account;

-
setting up a programme to revive the agricultural
sector;

-
setting up rural and cooperative credit funds as well
as a village development fund;

-
improvement of the income and standard of living of
the rural population by boosting productivity and
applying a policy of remunerative prices;

-
strengthening the physical resources available for
agricultural research;

-
providing institutions with the means to develop,
apply and follow up agricultural policy and
programmes;

-
intensifying and diversifying production in order to
reinforce food security, improve the nutritional
situation, permit import substitution and increase
exports;

-
ensuring environmentally supportable agricultural
growth;

-
development of human resources in the agricultural
sector;

-
management and collection of statistical data for use
in agricultural planning;

-
adequate support to the regional agricultural
chambers that have been established so that they can
strengthen their role in supporting farmers alongside
the State, which will, in future, act only as a
catalyst;

-
introduction of a land-ownership policy which
guarantees security of land tenure;

37.
In this area, the Government has progressively been
taking measures in the framework of the National Action
Plan for the Environment (PANE) with a view to improving
the management of the environment and promoting
environmentally sound economic and social development.

38.
To achieve this overall goal, environmental policy aims
at:

-
Strengthening national environmental management
capacities through public and private agencies and
non-governmental organizations;

-
ensuring that environmental concerns are given due
consideration in the planning and management of
economic and social development;

-
promoting sound and sustainable development of
natural resources and the environment while improving
living conditions and standards;

-
strengthening the movement towards subregional
integration and international cooperation in order to
ensure coordinated management of shared or
cross-border resources.

39.
In the field of trade, in particular, strategies will
focus on:

-
Drawing up and implementing environmental rules and
standards aimed at avoiding the consumption and use
of products that are harmful to health and the
environment;

-
review the price structure of gas to make it
accessible to the majority of citizens at prices
comparable to those of neighbouring countries,
thereby reducing the pressure on ligneous resources;

-
promoting the consumption of petroleum products that
are less harmful to the environment.

44.
In addition to the working of phosphate deposits, which
play a dominant role in the country's economy, accounting
for approximately 50 per cent of export earnings, Togo is
not really a mining country, despite the existence of
significant deposits of iron, chromite, manganese, etc.

45.
The main element of the policy to be conducted with a
view to promoting the mining sector are the following:

-
Diversification of mining export products;

-
strengthening of the human and physical resources of
the General Directorate of Mining and Geology;

-
encouragement of foreign investment by establishing
incentives to stimulate exploration activities in
Togo through the introduction of a new mining code;

-
promotion of non-industrial mining and by creating
incomes for small-scale miners.

46.
After having applied de facto the General Agreement on
Tariffs and Trade (GATT) 1947 during the colonial period,
Togo became a contracting party, or de jure
member, of the GATT on 20 March 1964.

47.
Since it had no representation in Geneva, Togo followed
GATT activities at a distance, either through its
ambassadors in one of the countries neighbouring
Switzerland, or through its fairly frequent information
missions.

48.
In the circumstances, Togo, like the African LDCs in
general, was practically absent from the Uruguay Round of
multilateral trade negotiations, and it did not
participate in the formal signing ceremonies of the Final
Act of the Uruguay Round which took place on 15 April
1994 in Marrakesh (Morocco).

49.
However, in addition to its general efforts to liberalize
economic and trade activities since the 1980s, Togo also
signed the Uruguay Round Final Act on 9 August 1994 in
Geneva. Its schedules of concessions (bindings) and
specific commitments in the field of services were drawn
up and transmitted to the WTO in April 1995.

50.
Upon presentation of the Uruguay Round Agreement and the
WTO framework by the Minister responsible for trade, the
National Assembly deliberated and adopted, on 11 April
1995, the bill authorizing the ratification of the
Agreement Establishing the WTO. This authorization came
into effect under Law No. 95-013/ER of 19 April 1995
promulgating the Agreement. Through these formalities,
Togo became an original Member of the WTO on 31 May 1995.

-
Adapt trade regulations and activities to the
requirements of international trade and take full
advantage of the opportunities offered.

-
Master and implement its notification obligations.

-
Conduct a periodic retrospective analysis, at the
international level, of its trade policy which must
be adapted to domestic needs in terms of sustainable
socioeconomic development and to the requirements of
international trade in the context of globalization:
to that end, Togo submitted its request to the WTO
for a first trade policy review, the process which is
now under way.

-
Take full advantage of the integrated framework for
trade-related technical assistance to the LDCs. On
the occasion of the High-Level Meeting organized by
the WTO, UNCTAD, ITC, UNDP, IMF and the World Bank on
27 and 28 October 1997 in Geneva for the purpose of
designing this framework, Togo prepared and submitted
to the WTO an overall assessment of its general
technical assistance needs. The above-mentioned
international organizations prepared a preliminary
document containing integrated replies, and Togo will
have to prepare observations concerning the proposed
replies before the round table scheduled to produce
an overall assessment of the needs expressed and the
replies given before their implementation: this
process is currently under way.

-
Increase familiarity with the Uruguay Round
Agreements and the WTO framework in Togo. While the
Uruguay Round Agreements and the WTO framework are
relatively well known among governmental and
para-governmental institutions and in the private
sector in Togo, there is a real need for assistance
in ensuring that the Uruguay Round Agreements are
better understood and the WTO better known in the
country. A national seminar on the subject will be
necessary.

-
Hold periodic information seminars on the Uruguay
Round Agreement and on the WTO, and on their
implications, their challenges, their advantages and
on ways of reducing the downside risk, in certain
cases, and in others of maximizing the chances of
deriving benefits. A seminar has been requested in
this connection, and was scheduled for February 1998.
However, it has been postponed, and will have to be
rescheduled.

-
Complete the impact assessment of the Uruguay Round
Agreements on the Togolese economy. Programmed by
UNCTAD, this study is currently being conducted by an
international expert and a national expert, a
professor in the Faculty of Economics and Management
(FASEG) of the University of Benin (UB). This study
should make it possible for Togo to identify the
constraints and the advantages of these Agreements
and the ways of managing them by scaling down the
challenges and taking advantage of the opportunities
offered. However, the work is still in a preliminary
stage and the timetable will have to be reviewed.

-
Take advantage of the technical assistance provided
in respect of access to trade information through the
Internet. Togo, and in particular the Ministry of
Trade, are now able to use a reference centre on the
multilateral trading system following the
installation of a computer and other accessories
giving them access to information sources available
on the Internet and CD-Roms. This assistance is to be
strengthened through the supply of further equipment.

-
Take advantage of the "Maison universelle"
proposed by Switzerland in the framework of the WTO
Headquarters Agreement in Geneva, whose facilities
will help the LDCs that wish to keep permanent
missions to the international organizations in
Geneva.

-
Identify and take advantage of the export and market
access opportunities for goods and services.

-
Enhance national skills in managing the Uruguay Round
Agreements and in the field of WTO trade policy in
general.

-
Put technical assistance to use in identifying the
challenges and opportunities of globalization with a
view to overcoming the former and taking full
advantage of the latter.

-
Maintain and respect the tariff bindings agreed and
the specific commitments made in the field of
services.

51.
Import and export licences, prohibitions and quotas
having been eliminated (see III.(1)(v), III.(1)(vi) and
III.(1)(vii) for details), the import and export regime
now boils down to the conditions, procedures and time
required for import and export. These elements relate to
banking transactions and formalities imposed by the port
of unloading or shipment, customs and the tax
authorities.

52.
As regards phosphates still subject to import licensing,
conditions and procedures also relate to banking
transactions, the obtention of licences from the Ministry
of Trade, and customs and port shipment formalities. In
such cases, licences are delivered within a period of
approximately 48 hours.

53.
Since the liberalization of trade in goods, no imports or
exports are subject to absolute prohibition or
quantitative restriction.

54.
However, the import of products considered hazardous, in
particular arms and ammunition, explosives and military
equipment, as well as narcotics, is strictly controlled

55.
These restrictions are justified for security reasons in
the case of arms, ammunition, explosives and military
equipment. In the case of narcotics, they are justified
on health, moral and social grounds.

56.
As regards pharmaceuticals and hygiene products, Togo
does not prohibit their entry into its market.

57.
There is no list of prohibited products. However, there
are regulated products, such as psychotropic substances
and products that are temporarily prohibited because of
their proven toxicity.

The
export of local industrial products, cereals and other
foodstuffs may be temporarily suspended to safeguard
domestic consumption in the event of shortages.Back
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